Myanmar’s Millennial Banker

Myanmar’s elite are having to adapt to new realities. For Htoo Htet Tay Za, head of AGD Bank, that means trying to create a modern bank in a backward financial system while battling allegations of cronyism levelled against his family

HTOO HTET TAY ZA could be a poster boy for overachievement. The 24-year-old has run Myanmar’s Asia Green Development Bank (AGD) since mid-2015, which makes him one of the youngest managing directors in international banking and a rare, if not the first, example of a millennial heading a national bank anywhere in the world.

The bank is owned by his father, Tay Za, who is widely regarded as Myanmar’s first billionaire and who owes his success largely to his close business links to the country’s former military rulers. But as Myanmar modernizes and reforms, Htet Tay Za’s prominent position as head of a big bank shows how the powerful elites are adapting to the new political reality.

When Asiamoney meets Htet in the bank’s teak-panelled boardroom in downtown Yangon, he is politeness personified, focused and articulate in the slight American accent that children schooled in Singapore’s international schools tend to adopt. And he’s on-message with the jargon of a contemporary banker, as if he’s been watching CNBC on a loop.

“My immediate vision for AGD Bank in technology is essentially to achieve financial inclusion through digital/mobile banking. I think this presents a lucrative opportunity to leap-frog brick-and-mortar approaches as by using digital/mobile banking as a channel, customers will have a greater opportunity to access financial services on the go and seamlessly,” he says.

AGD Bank has been on his watch for around 18 months, he explains, and he and his young management team are positioning it at “the leading edge of innovative fintech.”

The impression is of a bank that’s been in business for decades. Framed banknotes and bonds from Myanmar’s economic yesteryears, when the country was British-colonized Burma, are displayed around the boardroom walls. Yet AGD was only set up in 2010, Asiamoney points out, so these relics can’t be from the bank’s own vaults, surely? “We bought them in a market and thought they looked good and framed them for the wall,” Htet replies.

Another eye-catching detail are the advertisements offering a deal that is rarely seen anywhere in international banking these days: an invitation to invest in a fixed deposit in Myanmar kyat offering a 10% return. With lending rates fixed at 13% by the Central Bank of Myanmar, albeit in an economy where bank lending is barely developed, Htet insists money can be made with such a product.

“Interest rates here are quite high,” he says, rejecting any suggestion that it is a marketing ruse to build his customer base. The fixed deposit product, he says, was a promotion that AGD, one of the top four retail banks in Myanmar, ran from January to March this year.

“Usually, to get 10% per annum, customers have to contract a one-year fixed deposit. However with our promotion, they can contract for three months and enjoy the 10% per annum interest. The product has been successful as we have seen a rise in deposits.”

Htet’s big idea, he says, is to gain the confidence of the many localswho remain wary of banks. Given the country’s chequered financial history of bank runs and demonetization, many people prefer to convert any spare cash into gems or gold and keep it at home under the mattress or buried at secure family sites around the capital. A recent study by GIZ, the German government’s international development agency, found that barely one in five of the country’s bankable population actually had a bank account.

“We have to educate the public that it’s a good, normal thing for them to have a bank account,” Htet says. “We should make banking easy and implement it as part of peoples’ day-to-day lives. This would include teaching basic banking services in Myanmar’s education programmes, schools, hosting road shows in villages and small townships, as I feel most people still lack an understanding of a bank’s typical products and services.

“We want to be the most modern, innovative bank in Myanmar,” he says. It’s a noble ambition in a country desperate to modernize, and a profitable one, he claims.

“We expect our profits to triple this year due to an increase in business from trade finance and agricultural equipment hire purchase,” he says in an email response to questions. “We have 56 branches today (with 14 more to open by mid-2017) and total assets of 589 billion kyat ($433 million) as of 28 February 2017.”

Htet says he recently led a revamp of the bank’s image and is now focusing on growth in readiness for an IPO on Yangon’s nascent stock market, which would bring the number of listed companies to six. An IPO would also perhaps require AGD to disclose rather more financial information than it does at present. Type ‘annual report’ into the AGD website’s search box and the only result is the bank’s careers button. Tap ‘profit’ into the box and one is directed to foreign remittances and payments. Neither does the Tay Za family’s Htoo Group provide a breakdown of the profits or assets of its various businesses.

Htet, however, doesn’t hold back when it comes to publishing personal information. “Entrepreneur, philanthropist, hospitality enthusiast,” is how he describes himself on his own website. Typically for his tech-absorbed generation, Htet likes being highly visible, to talk about himself and to share what he’s doing in life.

His self-promotion is replicated across his myriad social media accounts, from Facebook, LinkedIn and Twitter through Flickr, Pinterest and beyond. He tells Asiamoney that his first love is the hotel and restaurant trade, and that he didn’t study to become a banker or have an ambition to become one. Asiamoney asks him if he’d be the managing director if his father didn’t own the bank, but he doesn’t respond.

“I’m a fitness enthusiast as well and have developed a keen interest in cuisine and the international stock market,” says Htet on his website. Educated abroad, in Singapore and Switzerland, he adds: “My devotion to my home nation sees me constantly seeking to learn more about Myanmar and its current affairs and people.”

He shares his efforts to acquire a Bachelor of Science degree at what he describes as the world’s top rated hotel school, the Ecole Hôtelière de Lausanne, his business interest in a Yangon hotspot, the Escape GastroBar (which is inexplicably linked to a Japanese eyewear site), and he writes of his co-development of a Singapore-based chat app called Wisper.

But it’s what is not described on his site that might be of moreinterestto those looking for a banking partner in fast-developing Myanmar, one of the world’s last unexploited markets for international finance.

Until last December, his father Tay Za and elder brother Pye Phyo Tay Za were subject to international sanctions, instigated by the US, because they were long-time cronies of Myanmar’s military junta. The junta ruled – and many say still do, particularly in business – for decades until democracy icon Aung San Suu Kyi became de facto leader a year ago, after elections. Under military patronage, Tay Za built an empire in property, aviation, agriculture, gemstones, mining and even the capital’s premier football club, Yangon United.

An official at AGD privately claims Htet was appointed as AGD boss on merit. But Htet is clearly backed by his father, whose Htoo Group boasts AGD as one of its assets. Htet is also Htoo’s executive director and his brother Phyo is group managing director.

“My devotion to my homeland and my desire to make it a better place were both inspired by my father,” Htet writes. He describes his father, Tay Za, as a philanthropist who, via a family foundation, “had the chance to engage in a host of charitable efforts.”

Which is not how Tay Za was described by the US State Department in a series of internal cables from 2007, published by Wikileaks.

‘To curry favour and win the most lucrative deals, 42-year-old Tay Za, Burma’s number one crony businessman, entertains regime leaders lavishly and hires their children in his many business ventures. Now active in all Burma’s profitable sectors, Tay Za first made his name as an arms dealer, and still maintains ties with Russia’s military supply industry. Valuable concessions in the timber, cement and liquor sectors have enlarged his empire, but his intimate ties to the regime entail obligations that strain his ability to maintain control,’ wrote an official of the US mission in Yangon in a leaked cable.

In 2007 it was estimated that Tay Za controlled as much 40% of the Myanmar economy. His Htoo Group maintains many of those same interests today, albeit in a larger economy.

In recent years, as Myanmar opened up and allowed more political and economic freedom, Tay Za embarked on a charm offensive in what seemed an attempt to position his business empire for democratic civilian rule.

Today, the message from the Tay Za clan, newly liberated from foreign sanctions, has changed. The flash cars are still visible in Tay Za’s sprawling and heavily protected family compound by Yangon’s Inya Lake but the conspicuous consumption has been toned down and is less evident as Myanmar grows richer while grappling to make its wobbly civilian-meets-military democratic cocktail work.

Htet says he and AGD want to help the new Myanmar to grow, building schools and libraries, “promoting environmental campaigns, and providing aid in various parts of the nation. I hope to continue my father’s and the foundation’s good work through both entrepreneurial and philanthropic means.”